We Think Some Shareholders May Hesitate To Increase SCGM Bhd's (KLSE:SCGM) CEO Compensation

CEO Hock Lee has done a decent job of delivering relatively good performance at SCGM Bhd (KLSE:SCGM) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 28 September 2022. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for SCGM Bhd

Comparing SCGM Bhd's CEO Compensation With The Industry

Our data indicates that SCGM Bhd has a market capitalization of RM133m, and total annual CEO compensation was reported as RM1.4m for the year to April 2022. That's a notable increase of 14% on last year. We note that the salary portion, which stands at RM1.28m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below RM912m, we found that the median total CEO compensation was RM757k. Accordingly, our analysis reveals that SCGM Bhd pays Hock Lee north of the industry median. Furthermore, Hock Lee directly owns RM8.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	RM1.3m	RM1.1m	90%
Other	RM143k	RM133k	10%
Total Compensation	RM1.4m	RM1.2m	100%

On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. It's interesting to note that SCGM Bhd pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

SCGM Bhd's Growth

SCGM Bhd's earnings per share (EPS) grew 67% per year over the last three years. In the last year, its revenue is up 15%.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has SCGM Bhd Been A Good Investment?

We think that the total shareholder return of 181%, over three years, would leave most SCGM Bhd shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for SCGM Bhd (1 is significant!) that you should be aware of before investing here.

Important note: SCGM Bhd is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.